Aberdeen Group Plc · LSE:ABDN
Aberdeen — H1 2021 Earnings Presentation
28 slides from Aberdeen's earnings presentation, Aug 10, 2021
Slide 1: abrdn plc Half year results 2021
abrdn plc Half year results 2021 10 August 2021
Slide 2: Welcome and agenda
Stephen Bird Stephanie Bruce Chief Executive Officer Chief Financial Officer Welcome Agenda Creating momentum Stephen Bird for our growth ambitions Half year 2021 Stephanie Bruce Financial results Chris Demetriou René Buehlmann Noel Butwell CEO, UK, EMEA and Americas CEO, Asia Pacific CEO, Adviser &
Slide 3: Creating momentum for our growth ambitions
Creating momentum for our growth ambitions Arresting revenue decline and improving operating leverage H1 2021 Movement Fee based revenue £755m +7% Adjusted operating profit £160m +52% 15% 21% c30% profit profit profit margin margin margin Cost/income ratio 6ppts 79% better 2017 FY H1 2023 2020 2021
Slide 4: Creating momentum by vector
Net flows Creating Institutional and Wholesale1 Investments Insurance2 momentum £0bn £5bn by vector £0bn (£13bn) (£5bn) Institutional and Wholesale - best half for net flows since (£25bn) (£10bn) H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 Investments merger1 2017 2018 2019 2020 2021 2017 2018 2
Slide 5: Update on our strategic priorities
Update on our strategic Strategic priorities priorities Growth in Asia Client ecosystems Solutions Technology UK adviser and Private markets consumer markets Responsible investing 4 | abrdn plc
Slide 6: Growth in Asia
Growth in Growth strategy Asia Accelerate regional AUM of regionally Region represents significant growth domiciled clients distribution of opportunity global products René Buehlmann joined as CEO Asia Pacific in March £18bn £46bn AUM managed regionally Strengthening Asian investment expertise, 10%
Slide 7: Growth momentum in private markets and alternatives
Growth Private markets AUM1 £75bn momentum £71bn in private £66bn £3.2bn 10x increase markets and £63bn £58bn £62bn £61bn net flows on prior year alternatives H1 2021 £50bn H1 2019 FY 2019 H1 2020 FY 2020 H1 2021 Private market capabilities play a key role in our growth strategy Enhancing and modern
Slide 8: Accelerating our market leading position in UK adviser market
Accelerating our market H1 2021 Client engagement hub Integrated e-signature capabilities leading position in UK adviser Adviser experience Adviser portal H2 2021 Reporting suite market programme Secure messaging Enhanced and more efficient digital drawdown journeys No.1 for AUA and gross flows1 202
Slide 9: Responsible behaviour, responsible investing
Responsible Net Zero commitments with 50% Joined Net Zero Asset Managers behaviour, reduction by 2025 initiative Top 2% in Dow Jones Responsible Carbon neutral across all operations responsible behaviour 98% of sourced electricity is renewable Sustainability Index 13th in Hampton-Alexander Review in
Slide 10: Half year 2021 Financial results
Half year 2021 Financial results Stephanie Bruce, CFO 9 | abrdn plc
Slide 11: Half year 2021 results
Half year 2021 results Adj. Adj. Fee based Fee revenue Cost/income Adj. capital operating operating revenue yield ratio generation expenses profit £755m 27.6bps £595m £160m 79% £176m 1% 6ppts +7% +0.8bps +52% +£73m lower better Net flows Net flows1 AUMA2 ex. liquidity1 (£5.6bn) (£1.9bn) £532bn (£5.7
Slide 12: Arresting decline in revenue
Arresting Fee based revenue decline in revenue £103m £819m £815m +7% Improving impact of yield with £755m £38m continued demand for higher margin (£62m) (£10m) products LBG £75m £719m £7m (£88m) (c£35m) £706m Benefit from markets and £10m higher (£11m) (£9m) (£41m) performance fees in H1 2021 LBG (c
Slide 13: Improving revenue impact from flows
Improving Impact of flows on revenue revenue impact £20m from flows £0m (£2m) Revenue benefitting from improved momentum in flows into higher margin (£20m) Institutional and Wholesale (ex. liquidity), Adviser and Personal Minimal revenue impact from liquidity (£40m) flows (c£1m) (£60m) (£80m) H1 201
Slide 14: Improving variability of cost base
Improving Adjusted operating expenses variability of cost base 1% lower 2% increase in staff costs reflecting £601m higher compensation accruals partially £6m £595m offset by lower staff numbers £2m £6m 4% reduction in non-staff costs due to Non-staff Non-staff £282m savings on outsourcing, travel a
Slide 15: Vector performance
Vector performance 14 | abrdn plc
Slide 16: Investments
Investments Fee based revenue increased 6% reflecting favourable market conditions, increase in performance fees and Adj. Fee based Fee revenue Cost/income increase in yields operating revenue1 yield ratio profit Cost discipline contributed to 5ppts £613m 26.3bps 79% improvement to cost/income ratio
Slide 17: Investments: Institutional and Wholesale
Investments Institutional and Wholesale H1 2021 Fee based revenue Fee based revenue yield Revenue movement Yield movement Institutional and +£36m Revenue before performance fees 8% Wholesale1 £490m 39.4bps +8% +0.1bp higher reflecting growth in all asset classes except fixed income and multi- asset
Slide 18: Investment performance
Investment 3 years FY 2020 H1 2021 performance Investments1 66% 66% Flat reflecting change in mix 54 Strategies positively rated by consultants Equities 74% 65% Reflects recent recovery led by (FY 2020: 52) emphasis on value Morningstar 4/5 star rated funds 125 Fixed income 81% 85% Performance remai
Slide 19: Adviser
Adviser Fee based revenue 26%, £18m, higher driven by: Adj. Fee based Fee revenue Cost/income Positive market movements operating revenue yield ratio Increased levels of average AUMA profit and continued positive net flow in £87m 25.3bps 57% £37m both platforms 10ppts Structural half year benefit of
Slide 20: Personal
Personal Fee based revenue 8% higher reflecting increased customer activity and positive markets Adj. Fee based Fee revenue Cost/income operating Small profit for first time, including a revenue yield ratio profit one-off benefit of c£3m £41m 55.9bps 90% £4m x5 fold increase in net flows (H1 2020: £
Slide 21: Capital generation aligned to profit
Capital Adjusted capital generation generation aligned to profit £200m £159m £176m £150m £103m H1 2021 Movement Adjusted profit after tax £123m £150m Adjusted £100m diluted 7.0p +3.7p Dividends received from £79m assocs./JVs and significant EPS listed investments Adj. PAT +90% £50m Net interest cred
Slide 22: Further strengthened capital position
Further Surplus regulatory capital strengthened +22% capital position Sources Uses of of capital capital £0.7bn £0.1bn (£0.1bn) £2.8bn Sale of 4.99% HDFC Life in June (£0.2bn) £0.2bn (£0.2bn) £2.3bn Proceeds from disposals largely relate to the sale of Parmenion completed on 30 June £0.2bn investmen
Slide 23: Investing to drive sustainable growth and returns
Investing to drive sustainable growth and returns Stephen Bird, CEO 22 | abrdn plc
Slide 24: Investing to drive sustainable growth and returns
Investing Disciplined approach to capital allocation to drive sustainable Capital structure growth and Regulatory Shareholder distributions Investment inorganic Strategic acquisitions Scale in Personal returns Balance sheet optimisation £3.9bn Regulatory Each of the three growth vectors have capital
Slide 25: We are futurists
We are futurists Stage One Next stage Investing for growth in each of A strong start to our three-year strategy the three vectors We harness the power of time Sharpening our investment capabilities and 52% growth in adjusted operating profits addressing investment performance We leverage technology
Slide 26: Q&A
Q&A 25 | abrdn plc
Slide 27: Forward-looking statements
Forward-looking statements This document may contain certain ‘forward-looking statements’ with respect to the financial the Group may not achieve its targets); exposure to third party risks including as a result of outsourcing; the condition, performance, results, strategy, targets, objectives, plan
Slide 28: abrdn plc registered office details
abrdn plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL www.abrdn.com © 2021 abrdn. All rights reserved. 27 | abrdn plc